GAME close to collapse, EA boss "confident" of market
GAME has said this morning it's "working actively" to resolve current stock issues and reviewing the business, including "all of its assets in the UK and international territories."
"Further to GAME's announcement of 29th February 2012 and recent press speculation, the Group confirms that it remains in discussions with its suppliers and lenders in relation to terms of trade that allow the business to operate within the facility provided by its banking syndicate, as announced on 3 February 2012, and to meet its revised strategic plan," a GAME statement this morning sent to MCV reads.
"While these discussions are ongoing, it has not been possible to source new products from a number of suppliers.
"The Board of GAME is working actively to resolve these issues as quickly as possible. This includes ongoing discussions with suppliers, seeking access to the original facility or alternative sources of funding, and reviewing the position of all of its assets in the UK and international territories.
"It is uncertain whether any of the solutions currently being explored by the Board will be successful or will result in any value being attributed to the shares of the Company.”
The statement comes The Sunday Times reported (via MCV) yesterday that the store has put itself for sale ahead of a two week deadline to pay landlords.
Its put in charge financial advisory group Rothschild in finding a buyer, with something similar possibly happening to its Australian and French arms. Deloitte will apparently handle its insolvency process if it comes to it.
It follows a report at the end of last week that senior staff were told to prepare for the worst and expect administration.
Before that, it was rumoured that US retailer GameStop had been interested in a takeover, with possible added interest towards GAME's Iberian arm.
When asked about a "UK retailer in distress" at a Wedbush Morgan event last week, while specifically avoiding to call it by name, EA CEO John Riccitiello said other retailers will grab hold of the puck that GAME has seemingly let go of.
"I'm really confident that the consumer that wants to buy Mass Effect or Madden or FIFA or whatever, if a particular retailer is gone, other retailers will absorb the business," he said.
"But I think in the fullness of time, I am extremely confident that, whether it's UK or France, or United States, et cetera, the retail marketplace will absorb that business.
"I don't think we're going to – we might lose 20,000 copies of Mass Effect 3 in the UK for the consumer that can't figure out another store to go to, but that would even surprise me. I mean I think we'll sell every unit.
"So, we love great retailer partners, and we, like I mentioned GameStop earlier and Best Buy and Amazon and others. They're great for us. If one goes away, the other guys pick up the slack. I really don't see it as anything other than a very temporary dislocation."
Meanwhile, shares in GAME have dropped to a record low of 0.5 pence.